How to Bargain with Hagglers

Everyone's experienced a haggler. Even if all you endured was just raised eyebrows, you've seen it happen. You mentioned a price and what you said wasn't expected. You got the furrowed brow look – or worse: "How much!?"

But whatever, you know how the consequences feel. You know what's it like dropping your price. Tiresome on a USB drive, it's irritating on a computer. Now imagine something much, much bigger. And how upsetting it'd be if no-one would pay what you wanted.

But there are ways to bargain with hagglers. Especially over the things that really matter. Like to know more? Read on…

One day you will sell

We discussed this last week. And the critical question it raised. Whether you're selling to realise cash or retire all that really matters is "how much do you need?"

Of course your business is only worth what a buyer will pay - no-one's going to fork-out more than they have to. So while you might say it's worth a lot others might think differently. And you end up disappointed - maybe crushed. All that work, all that passion, all that effort, all for some paltry sum?

It's your choice but do you really want to end up just getting what you're given? Don't you owe it to yourself to get more? As much as you reasonably can? What it's really worth?

What's on sale?

Buyers buy stuff they value. And the price they pay measures what they think it's worth. So what's a sensible price for your business? Well, there are all sorts of ways at arriving at numbers. Add up all the assets – like fixtures, fittings and equipment – and sell them second hand. You'd get something for sure but it'd be real knock-down. Another way is to take your profit and use a ‘multiplier'. So you get something representing the value of your customers. And maybe more than just the value of your assets.

But a question: why would anyone pay for customers they'd pick up anyway after you closed? Answer: they wouldn't. OK, what about the goodwill then – the fact customers use you because they like you? There must be some value in that? There is. But how much would you pay for something you couldn't buy? How much would you pay for something that disappeared the moment you bought it?

Who wants it?

Let's leave ‘worth' for now - we've drained it down enough for now. Let's turn and think about appeal. Who'd put value on what you've got? Who'd be interested in buying your business? Who'd shell-out their hard earned cash on your livelihood? Another computer business? Who?

Maybe they'd be interested in your assets if they're in a different town or on the other side of a city. But otherwise why would they buy stuff they've probably already got?

Maybe they'd be interested in your customers for the same reasons but otherwise why pay for customers they'd get regardless?

What about selling up to a member of staff? Well, OK if you've got them but how many are going to have enough money to invest? Besides, would you want to bargain really hard with someone you knew that well? You don't want to give it away do you? Not after everything you've put in...

Mmmm, seems like this selling thing isn't adding up to much. And it isn't. Because despite everything you've done and the years of benefit you've reaped, it has no real value for anyone else other than you. And how much you think it's worth becomes a pipe-dream. You're at the mercy of the hagglers - if they'd show any interest at all.